Wealth momentum spurs 6% profit growth for Big 3 banks

DBS and OCBC are expected to have higher PATMIs than previously forecasted.

Singapore’s Big 3 banks will see strong wealth momentum and lower credit costs, said RHB’s Singapore Research Team.

The bank’s research team has revised upward its sector earnings forecast for 2026-2028 by 2% per annum, and projects a sector-wide 6% growth in profit after tax and minority interests (PATMI).

DBS and OCBC are now expected to log higher PATMIs than previously forecasted, whilst no changes were made for UOB’s forecasted PATMI.

“These two banks have led sector performance YTD while UOB has lagged peers, possibly over a combination of slower earnings momentum and relatively weaker asset quality metrics,” RHB said in a report published on 28 May.

UOB’s credit costs are expected to normalise in FY2026, RHB said.

Singapore banks are enjoying renewed investor interest thanks to strong wealth momentum and fee income generation, as well as a shift in rate expectations, RHB said.

“DBS saw some slowdown in its wealth momentum in early April due to the Middle East conflict, but this has since picked up,” RHB said.

Meanwhile, UOB targets to double its wealth income by 2030, backed by a pipeline of product launches and initiatives, it added.

The three banks’ have pivoted to wealth management, having expected interest income and lending activity to decline in 2026, according to a report by CreditSights.

Singapore’s major banks are expected to emerge as indirect beneficiaries of heightened geopolitical tensions in the Middle East, UOB had said in an earlier report. 

“Heightened geopolitical uncertainties have reinforced Singapore’s safe-haven appeal, driving deposit growth and wealth management inflows into local banks,” the report said.

These inflows are strengthening private banking franchises and boosting fee-based income from wealth management, treasury services, and trading, it added.